European markets head for lower open, anticipating first ECB rate hike in over a decade

LONDON — European stocks are expected to open lower on Thursday with the region’s investors geared up for the European Central Bank‘s latest monetary policy decision, in which it’s widely expected to announce its first interest rate hike in years.

The U.K.’s FTSE index is seen opening 11 points lower at 7,256, Germany’s DAX 69 points lower at 13,212, France’s CAC 40 down 31 points at 6,151 and Italy’s FTSE MIB 442 points lower at 20,860, according to data from IG.

The European Central Bank’s policy meeting in Frankfurt on Thursday is at the forefront of investors’ minds, with policymakers having given advance notice of a first hike in 11 years. Still, this comes against a backdrop of slowing growth, the war in Ukraine and threats to energy supplies.

The ECB will publish its monetary policy decision after the meeting of the central bank’s governing council. A press conference will follow at 14:45 CEST with ECB President Christine Lagarde. In June, the central bank said that it intends to raise the key ECB interest rates by 25 basis points at today’s meeting.

Italy has been plunged into fresh political uncertainty with Prime Minister Mario Draghi expected to tender his resignation Thursday after a number of parties in the governing coalition abstained from a vote of confidence that was aimed at renewing and re-uniting the fractious alliance. Draghi won the vote but many senators refused to take part bringing the national unity government to the brink of collapse. Early elections could now take place in September or October.

Price rises continue to overshadow the region. On Wednesday, data out of the U.K. showed inflation hit yet another new 40-year high in June as food and energy prices continued to soar, escalating the country’s historic cost-of-living crisis.

Earnings on Thursday come from Roche, ABB, Givaudan, SAP, Ocado and AngloAmerican.

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